Russia's Sberbank says it issued a letter of credit (L/C) to facilitate a merger and acquisition deal enabling a Russian company to enter the Indian market by acquiring a functioning business in its sector that is already operating in India.

The deal was completed in one month, considerably faster than would normally be expected for such a transaction according to a statement issued by the bank.

First time L/C deal

The Russian majority state-owned banking and financial services company headquartered in Moscow says all settlements between the parties in the deal were carried out on the basis of an L/C issued by its branch in India.

This is the first time the bank has carried out a Russian-Indian merger and acquisition deal with payment using L/Cs, which Sberbank's deputy chairman, Anatoly Popov, reckons will increasingly feature in its offerings to facilitate trade and investment between Indian and Russian counterparties.

Sberbank's Indian ambitions

"Sberis a reliable partner for relationships between Russian and Indian counterparties. In particular, using L/Cs for settlements guarantees the safekeeping of funds and security of payments," he says.

Popov also says Sberbank is actively growing its Indian operations, rapidly building both the size of its business operations at its Indian branch and expanding the range of offerings available to the bank's clients.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.